The death Wednesday of Kenneth Lay, the founder and former chairman and CEO of Enron Corp., means any restitution in the criminal case will probably be vacated and the future of the Securities and Exchange Commission and civil cases will be more difficult to pursue, according to attorneys following the case.
"It's a tragic end to a tragic story," said Kirby Behre, a former federal prosecutor and now partner at Paul, Hastings, Janofsky & Walker in Washington. "You don't have to be doctor to know that he was under a lot of stress. The sentencing won't go forward, mooted by his death, but the more interesting issue will be seizure and now forfeiture of the assets -- do they transfer to his wife? Even if they pass to a spouse or family, they're still attachable and still forfeitable to the government."
Jacob Frenkel, a defense attorney at Shulman Rogers Gandal Pordy & Ecker in Rockville, Md., who worked at the SEC and is also a former federal prosecutor, said while Lay's death is sad and shows the "human soul" of the case, there will be a lot of pressure on the government to pursue Lay's assets. "But whether it can be done through a criminal proceeding, that's the unanswered question. It's not a case against an entity; it's a case against him, and he's no longer here. Then there's the SEC case and civil litigation. Those seeking to pursue his assets may or may not be able to find recovery."